Since 1 July 2012, regulation 8.02B of the Superannuation Industry Supervision Regulations 1994(SISR) has required SMSF to value fund assets at their market value in the accounts and statements. As part of the completion of the fund’s independent audit, the SMSF auditor needs to obtain sufficient appropriate audit evidence from SMSF trustees to verify the value of a fund’s investments. Importantly, it is not the auditor’s job to undertake a valuation but they should seek evidence that shows how the asset was valued, including the method used and the data relied upon. The ATO has previously release market valuation guidelines for SMSFs to help guide trustees in valuing assets for super purposes.

Insufficient support to verify asset?

If the auditor is unable to obtain sufficient verification that material assets are valued at market value, the ATO makes very clear that the auditor should qualify the financial and compliance report sections of their SMSF Independent auditor’s report stating they have been unable to obtain sufficient appropriate audit evidence to verify the asset values. Furthermore, they should also lodge an Auditor/actuary contravention report for the contravention and notify the trustees in a management letter.

The ATO has indicated that this type of contravention (reg. 8.02B) was the most common contravention not identified or reported by auditors and referred to ASIC in 2018.

Author: Aaron Dunn

Financial services professionals rely on Aaron for expertise on SMSF and the growth of the sector. Aaron’s insights into technical issues and the SMSF industry means he is regularly asked to participate in government and regulatory reviews, including the Super System Review and the Reinventing the ATO program.
Aaron is a Certified Practising Accountant (CPA) and SMSF Specialist Advisor (SSA), having worked within the SMSF sector for more than 20 years. He is the CEO & Co-founder of Smarter SMSF (formerly The SMSF Academy).
Aaron is a family man who loves his sport, in particular AFL football (Essendon) and athletics, where he was previously a nationally ranked high jumper having jumped a personal best of 2.14m.